Power plant costs pile up – by Bryan Meadows (Thunder Bay Chronicle-Journal – November 28, 2012)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

The bills are piling up amid failed attempts to convert the coal-fired Thunder Bay Generating Station to alternate fuels. The Chronicle-Journal has learned that Ontario Power Generation has cancelled a contract with Union Gas, at a cost of more than $5 million, that would have tied the power station to the Union Gas pipeline system.

The project was integral to converting the coal-fired plant to burning natural gas as fuel. Timmins-James Bay MPP Gilles Bisson said Tuesday that the Liberal government has now spent $20 million on its on-again, off-again plans to convert the Thunder Bay GS from coal to natural gas.

“If the government’s going to spend $20 million, they should walk away with something more than the bill they hand ratepayers,” Bisson said. “Instead of building responsibly to meet our province’s electricity needs, this Liberal government spends whatever they need to meet their party’s needs at election time.”

Bisson noted that the conversion of the Thunder Bay plant from coal to gas has been started and stopped twice. Conversion of the plant was announced in 2005 but the plan was cancelled in 2006. In August 2011, work started again, but it stopped this month.

Ontario Power Generation reported the 2006 cancellation of the conversion cost Ontarians $11 million, and the cost of a 2012 cancellation will total $9 million, including $5.5 million to Union Gas and $3.5 million to OPG for “engineering, project management and other’’ costs, according to OPG documents researched by the NDP.

The station’s conversion to run on natural gas was put on hold this month by the Liberals, because the Ontario Power Authority (OPA) says there are better, and cheaper ways to power the North.

Halting the conversion, the OPA said, will save $400 million, and power can be generated from other sources, such as southern Ontario via an expanded east-west tie-line. The government has not made a final decision about the conversion, as the OPA is still finalizing its alternative plan.

The province is phasing out coal-fired power generation at plants like the Thunder Bay Generating Station. The deadline to be off coal is Dec. 31, 2014.

Union Gas spokeswoman Andrea Stass confirmed that the contract with OPG was cancelled by provincially owned OPG.
Under the contract, said Stass, “we can recoup costs we’ve incurred to date.”

While the company is still finalizing the figure, she said, “it will be more than $5 million.”

Stass said the pipeline to the OPG plant was part of a two-part project where the pipeline system was to be upgraded with larger pipe from the TransCanada PipeLine station, 20 kilometres south to Union Gas’s Belrose station and then to the Mission Island power plant.

“It made economic sense to combine those projects,” she said.

But with the conversion project cancelled, Stass said, the section to the Belrose station(which was to be upgraded due to aging pipe, will be replaced with similar-sized pipe.

The Environmental Assessment report for that project has been completed and submitted to the Ontario Energy Board. If approved, construction would go ahead next year, Stass said.

The City of Thunder Bay and Northwestern Ontario Municipal Association strongly support the conversion of the Thunder Bay Generating Station.

While the OPA argues that Thunder Bay’s power needs can be met by the east-west power tie, the Common Voice Northwest Energy Taskforce, made up of the region’s municipalities and chambers of commerce, say the as-yet-unapproved link will not provide the power reliability needed to develop the region’s burgeoning mining sector.

“The McGuinty Liberals spent hundreds of millions of dollars to cancel the Mississauga and Oakville plants just to save a few seats,” Bisson said.

“People are tired of paying the price for politicians playing politics with our power system,” he said.

Thunder Bay-Atikokan MPP Bill Mauro, who has said he would try to get the plant conversion back on track, could not be reached Tuesday.